Ladbrokes, promises to do its best and deal with the problem betting serious issue in the UK and modify responsible betting policies.
Ladbrokes is a UK betting company, which also offers online and mobile betting services. It is one of the giants in the gambling business and it was founded in 19th century.
Currently, the operator employs over 15,000 people and is a market leader in retail bookmaking in the UK, Ireland, Belgium and Spain, operating a total of more than 2,800 betting shops.
Ladbrokes betting operator in the UK promises to address problem betting caused by FOBTs
• The company will relate the payment of its executives to the effectives of the problem gambling efforts
• The operator will introduce changes to its responsible betting policies
• FOBTs account for almost 40% of Ladbrokes earnings
Ladbrokes, which operates under UK gambling laws, is experiencing serious criticism related to addict gamblers, therefore the company took the initiative to promise linking between executive salaries in the future and problem gambling targets. Additionally, it is putting together a board committee, which will investigate responsible betting policies.
What the company aims to achieve is calming down the society over the rather controversial topic of fixed odds betting terminals.
The main critique that Ladbrokes has to address is coping with the widespread opinion that FOBTs are the “crack cocaine of gambling”. These machines give bettors the opportunity to gamble large amounts of sums in short periods of time, allowing for wagering addiction to be developed.
Ladbrokes recently initiated dialogues with Helen Grant, the minister of State for Sport and Tourism, also responsible for gambling, as well as some of the biggest industry stakeholders, claiming that it will promote the Association of British Bookmakers’ code of player protection on its shops’ windows, effective immediately.
The letter, which the operator sent also, promises to link the future payment of executives, including the company’s chief executive, Richard Glynn, to the efforts of handling problem gambling. It is still unclear how the operator will measure its success in the area.
Richard Glynn wrote in a letter, obtained by the media: “On Tuesday, we will also announce that the Ladbrokes board has decided to formalize a number of responsible gambling performance measures into senior executives’ remuneration. A committee will be established, reporting to the main PLC board, to oversee this and put the measures into practice from 2015 at the latest.”
This letter will probably raise certain questions both from the investors’ side, as well as all other interested parties, who are concerned about the threat of an imminent government attack on the profitable high-stakes gambling machines.
David Cameron recently promised that he would attend to the “problem” of FOBTs, pointing out that the government would act after the industry-funded review reports come out in the next couple of months.
In addition to the social discontent of the devastating effect of FOBTs on British society, there is also a widespread political criticism of the machines. Ed Miliband, the Labors’ leader, said that they are “spreading like an epidemic.”
The role of FOBTs for Ladbrokes
FOBTs have become important money makers for major betting chains like Ladbrokes, William Hill and Gala Coral. According to research group Mintel, the total of 33,000 FOBTs in the UK earn around GBP 1.6 billion of the industry’s in-store takings of GBP 3 billion.
Barclays analysts’ estimate that Ladbrokes has the greatest dependence on FOBTs. Fixed terminals account for almost 40% of the operator’s earnings, which is much more in comparison to 26% for William Hill before tax and interest.
After the Prime minister’s comment, Ladbrokes shares fell drastically in January and are down with more than 13% so far in 2014.
Bookmakers did their best to address and mellow the major criticism by introducing new measures to make sure that gamblers use FOBTs “responsibly.”
The executives of major betting operators – Ladbrokes, Gala Coral, Paddy Power, William Hill and Betfred sent a letter to the media saying that “overwhelming majority of our machine customers gamble responsibly.”
The letter continued: “Problem gambling levels in the UK are low by international standards, amounting to around half a percent of the population, and have not increased since the introduction of gaming machines in betting shops or the inception of online gambling.”